The 13-year loan will be disbursed over the next three years, Vale said in a regulatory filing. The amount lent by the Bank of China and the Export-Import Bank of China will help cover 80 percent of the cost of the project, the filing said.
The ships will be used to transport iron ore to China from Brazil. The deal marks yet another sign of growing commercial ties between the two so-called BRIC countries (Brazil, Russia, India and China).
The deal comes at a time when declining borrowing costs and rising demand for corporate debt has allowed Vale and other Brazilian companies to raise more than $4 billion in global capital markets this week. Earlier this week, Vale sold $1.75 billion worth of bonds in two parts at a lower yield.
The Rio de Janeiro-based company, a former state giant that was privatized in 1997, is adding to its fleet of vessels to create a shuttle service between Brazil and China, while building up distribution centers in Asia to reach out to customers more efficiently.
Vale, which sells most of its iron ore to China-based steelmakers and industrial companies, hired Rongsheng Shipbuilding and Heavy Industries to build the vessels back in August 2008.
Each ship will be able to carry 400,000 deadweight tonnes ore and deliveries are expected between the start of 2011 and the end of 2012.
Deadweight tonnes, or dwt, is an expression of a ship's carrying capacity. (Reuters)
